Exhibit 10.3
SECOND AMENDED AND RESTATED PARENT GUARANTY
THIS SECOND AMENDED AND RESTATED PARENT GUARANTY (as such agreement
may be amended, supplemented, modified or amended and restated from time to
time, this "Guaranty") dated as of November 14, 2003 is made by ANNTAYLOR
STORES CORPORATION, a Delaware corporation, with its principal place of
business at 142 West 57th Street, New York, New York 10019 (the "Guarantor"),
in favor of BANK OF AMERICA, N.A., in its capacity as Administrative Agent for
each of the Lenders now or hereafter party to the Credit Agreement (as defined
below) (the "Agent"). Capitalized terms used but not defined herein have the
meanings ascribed thereto in the Credit Agreement (as defined below).
R E C I T A L S:
WHEREAS, ATI, the Agent, the lenders referred to therein, the
syndication agents named therein and the issuing banks named therein have
entered into that certain $150,000,000 Credit Agreement dated June 30, 1998
(as amended, the "Original Credit Agreement"), as amended and restated
pursuant to the terms of that certain $175,000,000 Amended and Restated Credit
Agreement dated April 30, 2001 (as amended, the "Restated Credit Agreement");
and
WHEREAS, at the Borrowers' request, the Lenders, the Agent, and the
syndication and documentation agents party thereto, have agreed to amend and
restate the Restated Credit Agreement in its entirety as of the date hereof (as
so amended and restated and as such agreement may be further amended,
supplemented, modified, or amended and restated from time to time, the "Credit
Agreement"); and
WHEREAS, the Guarantor is the parent of the Borrowers and has and
will materially benefit from the Loans made and to be made, and the Letters of
Credit issued and to be issued, under the Credit Agreement; and
WHEREAS, the Guarantor and the Agent have entered into that certain
ATSC Guaranty dated June 30, 1998 (as amended, the "Original Guaranty")
pursuant to which the Guarantor has guaranteed the full and prompt payment and
performance of the ATI's Obligations under the Original Credit Agreement, as
amended and restated pursuant to the terms of that certain Amended and
Restated ATSC Guaranty, dated April 30, 2001 (as amended, the "Restated
Guaranty").
NOW, THEREFORE, in consideration of the above premises and in order
to induce the Lenders and each Letter of Credit Issuer to amend and restate
the Restated Credit Agreement and continue to, respectively, make Loans and
issue Letters of Credit under the Credit Agreement, the Guarantor hereby
agrees, and the Agent for its benefit, and for the benefit of the Lenders and
the Issuing Banks, by acceptance hereof, hereby agrees as follows:
1. Guaranty.
(a) The Guarantor hereby unconditionally, continually and irrevocably
guarantees to the Agent, for its benefit and the benefit of the Lenders and
the Letter of Credit Issuers, the full and prompt payment when due, whether at
maturity or earlier, by reason of acceleration, mandatory prepayment or
otherwise, and in accordance with the terms and conditions of the Credit
Agreement and all other Loan Documents, of all of the Obligations, whether or
not from time to time reduced or extinguished or hereafter increased or
incurred, whether or not recovery may be or hereafter may become barred by any
statute of limitations, and whether enforceable or unenforceable as against
the Borrowers, now or hereafter existing, or due or to become due (all such
indebtedness, liabilities and obligations being hereinafter collectively
referred to as the "Guaranteed Obligations"). For purposes of this Guaranty,
any Affiliate of any Lender, which is a party to a Hedge Agreement or Foreign
Currency Exchange Contract with any Borrower or any of its respective
Restricted Subsidiaries, shall be deemed to be a "Lender". This Section 1
continues, reaffirms and amends, as the case may be, the guarantees under the
Original Guaranty and the Restated Guaranty.
(b) The Guarantor further agrees that, if any payment made by any
Borrower or any other person and applied to the Guaranteed Obligations is at
any time annulled, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of Collateral are required to be returned by any of the Lenders
or any of the Letter of Credit Issuers to any Borrower, its estate, trustee,
receiver or any other party, including, without limitation, the Guarantor,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the Guarantor's liability
hereunder (and any lien, security interest or other collateral securing such
liability) shall be and remain in full force and effect, as fully as if such
payment had never been made, or, if prior thereto this Guaranty shall have
been cancelled or surrendered (and if any lien, security interest or other
collateral securing Guarantor's liability hereunder shall have been released
or terminated by virtue of such cancellation or surrender), this Guaranty (and
such lien, security interest or other collateral) shall be reinstated in full
force and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of the
Guarantor in respect of the amount of such payment (or any lien, security
interest or other collateral securing such obligation).
(c) The Guarantor further agrees to pay all costs and expenses upon
demand including, without limitation, all court costs and reasonable
attorneys' fees and expenses (including the allocated cost of in-house
counsel) paid or incurred by the Agent (i) in endeavoring to collect all or
any part of the Guaranteed Obligations after the same become due and owing
from, or in prosecuting any action against, the Guarantor or any other
guarantor of all or any part of the Guaranteed Obligations or (ii) in
endeavoring to realize upon (whether by judicial, non-judicial or other
proceedings) any Collateral or any other collateral securing Guarantor's
liabilities under this Guaranty.
2. Payment. The Guarantor agrees that if any Borrower shall default
in the payment or performance of any of the Guaranteed Obligations, whether
with respect to principal, interest, premium, fee (including, but not limited
to, loan fees and attorneys' fees and expenses), or otherwise, when and as the
same shall become due, and after expiration of any applicable grace period,
whether according to the terms of the Credit Agreement, by acceleration, or
otherwise, or upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, then the Guarantor will, upon demand
thereof by the Agent, fully pay to the Agent, for the benefit of the Lenders
and the Letter of Credit Issuer, an amount equal to all the Guaranteed
Obligations then due and owing.
3. Representations and Warranties.
The Guarantor hereby represents and warrants to the Agent that each
representation and warranty made by Borrowers in Article 6 of the Credit
Agreement applicable to the Guarantor is true and correct, which
representations and warranties (except such representations and warranties
which are expressly made as of a different date) shall survive the execution
and delivery of this Guaranty, and shall, except to the extent that the same
have been modified by a writing delivered to and accepted in writing by the
Agent, and, other than with respect to changes permitted or contemplated by
the Credit Agreement, continue to be true and correct on the date of each
Loan, and on the date of issuance of each Letter of Credit.
4. Waivers; Other Agreements.
(a) The Agent is hereby authorized, without notice to or demand upon
the Guarantor, which notice or demand is expressly waived hereby, and without
discharging or otherwise affecting the obligations of the Guarantor hereunder
(which shall remain absolute and unconditional notwithstanding any such action
or omission to act), from time to time, to:
(i) supplement, renew, extend, accelerate or otherwise
change the time for payment of, or other terms relating to, the Guaranteed
Obligations, or otherwise modify, amend, restate or change the terms of any
promissory note or other agreement, document or instrument (including the
Credit Agreement and the other Loan Documents) now or hereafter executed by
any Borrower and delivered to the Agent, including, without limitation, any
increase or decrease of the rate of interest thereon;
(ii) waive or otherwise consent to noncompliance with any
provision of any instrument evidencing the Guaranteed Obligations, or any part
thereof, or any other instrument or agreement in respect of the Guaranteed
Obligations (including the Credit Agreement and the other Loan Documents) now
or hereafter executed by any Borrower and delivered to the Agent;
(iii) accept partial payments on the Guaranteed Obligations;
(iv) receive, take and hold additional security or
collateral for the payment of the Guaranteed Obligations, or for the payment
of any other guaranties of the Guaranteed Obligations or other liabilities of
any Borrower, and exchange, enforce, waive, substitute, liquidate, terminate,
abandon, fail to perfect, subordinate, transfer, otherwise alter and release
any such additional security or collateral;
(v) apply any and all such security or collateral and direct
the order or manner of sale thereof as the Agent may determine in its sole
discretion;
(vi) settle, release, compromise, collect or otherwise
liquidate the Guaranteed Obligations or accept, substitute, release, exchange
or otherwise alter, affect or impair any security or collateral for the
Guaranteed Obligations or any other guaranty therefor, in any manner;
(vii) add, release or substitute any one or more other
guarantors, makers or endorsers of the Guaranteed Obligations and otherwise
enforce its rights under the Loan Agreements against any Borrower or any other
guarantor, maker or endorser as the Agent may elect in its sole discretion;
(viii) apply any and all payments or recoveries from the
Borrower, from any other guarantor, maker or endorser of the Guaranteed
Obligations or from the Guarantor to the Guaranteed Obligations to the
Obligations in such order as provided in Section 3.8 of the Credit Agreement,
whether such Guaranteed Obligations are secured or unsecured or guaranteed or
not guaranteed by others;
(ix) apply any and all payments or recoveries from the
Guarantor or any other guarantor, maker or endorser of the Guaranteed
Obligations or sums realized from security furnished by any of them upon any
of their indebtedness or obligations to the Agent as the Agent in its sole
discretion, may determine, whether or not such indebtedness or obligations
relate to the Guaranteed Obligations; and
(x) refund at any time, at the Agent's sole discretion, any
payment received by the Agent in respect of any Guaranteed Obligations, and
payment to the Agent of the amount so refunded shall be fully guaranteed
hereby even though prior thereto this Guaranty shall have been cancelled or
surrendered (or any release or termination of any collateral by virtue
thereof) by the Agent, and such prior cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligations of
the Guarantor hereunder in respect of the amount so refunded (and any
collateral so released or terminated shall be reinstated with respect to such
obligations);
even if any right of reimbursement or subrogation or other right or
remedy of the Guarantor is extinguished, affected or impaired by any of the
foregoing (including, without limitation, any election of remedies by reason
of any judicial, non-judicial or other proceeding in respect of the Guaranteed
Obligations which impairs any subrogation, reimbursement or other right of
Guarantor).
(b) The Guarantor hereby agrees that this Guaranty is a continuing,
unconditional guaranty of payment and performance and not of collection and
that its obligations under this Guaranty are primary, absolute and
unconditional and shall not be discharged or otherwise affected as a result
of:
(i) the invalidity or unenforceability of any security for
or other guaranty of the Guaranteed Obligations or of any promissory note or
other document (including, without limitation, the Credit Agreement)
evidencing all or any part of the Guaranteed Obligations, or the lack of
perfection or continuing perfection or failure of priority of any security for
the Guaranteed Obligations or any other guaranty therefor;
(ii) the absence of any attempt to collect the Guaranteed
Obligations from the Borrower or any other guarantor or other action to
enforce the same;
(iii) failure by the Agent to take any steps to perfect and
maintain any security interest in, or to preserve any rights to, any security
or collateral for the Guaranteed Obligations or any other guaranty therefor;
(iv) the Agent's election, in any proceeding instituted
under Chapter 11 of Title 11 of the United States Code (11 U.S.C. ss. 101 et
seq.) (the "Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code;
(v) any borrowing or grant of a security interest by the
Borrower, as debtor-in-possession, or extension of credit, under Section 364
of the Bankruptcy Code;
(vi) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of the Agent's claim(s) for repayment of the
Guaranteed Obligations;
(vii) any use of cash collateral under Section 363 of the
Bankruptcy Code;
(viii) any agreement or stipulation as to the provision of
adequate protection in any bankruptcy proceeding;
(ix) the avoidance of any lien in favor of the Agent for any
reason;
(x) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against any Borrower, the Guarantor or any other guarantor, maker or endorser,
including without limitation, any discharge of, or bar or stay against
collecting, all or any of the Guaranteed Obligations (or any interest thereon)
in or as a result of any such proceeding;
(xi) failure by the Agent to file or enforce a claim against
the Borrower or its estate in any bankruptcy or insolvency case or proceeding;
(xii) any action taken by the Agent that is authorized by
this Guaranty;
(xiii) any election by the Agent under Section 9-501(4) of
the Uniform Commercial Code, or any successor provision, as enacted in any
relevant jurisdiction (the "Code") as to any security for the Guaranteed
Obligations or any guaranty of the Guaranteed Obligations; or
(xiv) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
(c) The Guarantor hereby waives:
(i) any requirements of diligence or promptness on the part
of the Agent;
(ii) presentment, demand for payment or performance and
protest and notice of protest with respect to the Guaranteed Obligations;
(iii) notices (A) of nonperformance, (B) of acceptance of
this Guaranty, (C) of default in respect of the Guaranteed Obligations, (D) of
the existence, creation or incurrence of new or additional indebtedness,
arising either from additional loans extended to any Borrower or otherwise,
(E) that the principal amount, or any portion thereof, and/or any interest on
any instrument or document evidencing all or any part of the Guaranteed
Obligations is due, (F) of any and all proceedings to collect from any
Borrower, any endorser or any other guarantor of all or any part of the
Guaranteed Obligations, or from anyone else, and (G) of exchange, sale,
surrender or other handling of any security or collateral given to the Agent
to secure payment of the Guaranteed Obligations or any guaranty therefor;
(iv) any right to require the Agent to (a) proceed first
against any Borrower, or any other person whatsoever, (b) proceed against or
exhaust any security given to or held by the Agent in connection with the
Guaranteed Obligations, or (c) pursue any other remedy in the Agent's power
whatsoever;
(v) any defense arising by reason of (a) any disability or
other defense of any Borrower, (b) the cessation from any cause whatsoever of
the liability of any Borrower, (c) any act or omission of the Agent or others
which directly or indirectly, by operation of law or otherwise, results in or
aids the discharge or release of any Borrower or any security given to or held
by the Agent in connection with the Guaranteed Obligations;
(vi) any and all other suretyship defenses under applicable
law; and
(vii) the benefit of any statute of limitations affecting
the Guaranteed Obligations or the Guarantor's liability hereunder or the
enforcement hereof.
In connection with the foregoing, the Guarantor covenants that this
Guaranty shall not be discharged, except by complete performance of the
obligations contained herein.
(d) The Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrowers, of any and all endorsers
and/or other guarantors of any instrument or document evidencing all or any
part of the Guaranteed Obligations and of all other circumstances bearing upon
the risk of nonpayment of the Guaranteed Obligations or any part thereof that
diligent inquiry would reveal and the Guarantor hereby agrees that the Agent
shall not have any duty to advise the Guarantor of information known to the
Agent regarding such condition or any such circumstances.
(e) Notwithstanding anything to the contrary in this Guaranty, the
Guarantor hereby irrevocably waives all rights which may have arisen in
connection with this Guaranty to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section 509 thereof, under
common law or otherwise) of the Agent, the Lenders or the Letter Credit of
Issuers against any Borrower or against any collateral security or guarantee
or right of offset held by such Person for the payment of the Obligations. The
Guarantor hereby further irrevocably waives all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against any Borrower or any other
Person, which may have arisen in connection with this Guaranty. So long as the
Obligations remain outstanding, if any amount shall be paid by or on behalf of
any Borrower to the Guarantor on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Agent in the exact form received by the
Guarantor (duly indorsed by the Guarantor to the Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order
as the Agent may determine. The provisions of this paragraph shall survive the
term of this Guaranty and the payment in full of the Obligations and the
termination of the commitments of the Lenders to extend credit under the
Credit Agreement , the termination or expiration of all Letters of Credit or
the full and irrevocable cash collateralization thereof and the termination of
the Credit Agreement.
(f) The Guarantor hereby agrees that any indebtedness of any Borrower
now or hereafter owing to the Guarantor is hereby subordinated to all of the
Guaranteed Obligations, whether heretofore, now or hereafter created (the
"Subordinated Debt"), and that without the prior consent of the Agent, the
Subordinated Debt shall not be paid in whole or in part until the Guaranteed
Obligations have been paid in full, the commitments of the Lenders to extend
credit under the Credit Agreement have been terminated, no Letters of Credit
exist that have not been Fully Supported, and the Credit Agreement has been
terminated and is of no further force or effect, except that payments of (i)
principal on the Subordinated Debt shall be permitted so long as no Default or
Event of Default shall have occurred and be continuing to the extent such
payments would not render such Borrower incapable of performing the Guaranteed
Obligations and (ii) interest on the Subordinated Debt shall be permitted so
long as no notice of Event of Default shall have been delivered to ATI or any
other Borrower by the Agent or any Lender. The Guarantor will not accept any
payment of or on account of any Subordinated Debt at any time in contravention
of the foregoing. At the request of the Agent, the applicable Borrower shall
pay to the Agent all or any part of the Subordinated Debt and any amount so
paid to the Agent shall be applied to payment of the Guaranteed Obligations.
Each payment on the Subordinated Debt received in violation of any of the
provisions hereof shall be deemed to have been received by Guarantor as
trustee for the Agent and shall be paid over to the Agent immediately on
account of the Guaranteed Obligations, but without otherwise affecting in any
manner the Guarantor's liability under any of the provisions of this Guaranty.
The Guarantor agrees to file all claims against the applicable Borrower in any
bankruptcy or other proceeding in which the filing of claims is required by
law in respect of any Subordinated Debt, and the Agent shall be entitled to
all of the Guarantor's right thereunder. If for any reason the Guarantor fails
to file such claim at least thirty (30) days prior to the last date on which
such claim should be filed, the Agent, as the Guarantor's attorney-in-fact, is
hereby authorized to do so in the Guarantor's name or, in the Agent's
discretion, to assign such claim to and cause proof of claim to be filed in
the name of the Agent or its nominee. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to
pay such claim shall pay to the Agent the full amount payable on the claim in
the proceeding, and, to the full extent necessary for that purpose, the
Guarantor hereby assigns to the Agent all Guarantor's rights to any payments
or distributions to which the Guarantor otherwise would be entitled. If the
amount so paid is greater than the Guarantor's liability hereunder, the Agent
will pay the excess amount to the party entitled thereto. In addition, the
Guarantor hereby appoints Agent as its attorney-in-fact to exercise all of the
Guarantor's voting rights in connection with any bankruptcy proceeding or any
plan for the reorganization of such Borrower.
(g) The Guarantor shall comply with all covenants applicable to it
under the Credit Agreement and shall otherwise take no action which will cause
a Default or Event of Default under the Credit Agreement. The Guarantor shall
also cause each Borrower to comply with all covenants applicable to such
Borrower under the Credit Agreement.
(h) Notwithstanding anything to the contrary in this Guaranty or any
other Loan Document, the Guarantor shall not (a) conduct, transact or
otherwise engage in, or commit to conduct, transact or otherwise engage in,
any business or operations other than those incidental to its ownership of the
equity Securities of the Borrowers, (b) incur, create, assume or suffer to
exist any Indebtedness or other liabilities or financial obligations, except
(i) nonconsensual obligations imposed by operation of law, (ii) pursuant to
the Loan Documents to which it is a party, (iii) obligations with respect to
its Securities or (c) own, lease, manage or otherwise operate any properties
or assets (including cash (other than cash received in connection with
Restricted Payments made by any Borrower in accordance with the Credit
Agreement pending application in the manner contemplated by the Credit
Agreement) and cash equivalents) other than (i) the ownership of shares of
equity Securities of the Borrowers, (ii) the ownership of one share of capital
stock of AnnTaylor Sourcing Far East Limited, and (iii) ownership of the
Convertible Debentures Note; provided that, notwithstanding the foregoing, the
Guarantor may from time to time conduct activities directly related to the
business of the Borrowers and their Subsidiaries that the Borrowers and/or
their Subsidiaries would be permitted to conduct at such time under the
applicable provisions of the Credit Agreement so long as, prior to commencing
any such activity, the Agent shall, by written consent (which may only be
requested hereunder when no Default or Event of Default has occurred and is
continuing), have reasonably determined that such activity or its consequences
could not reasonably be expected to have an adverse effect on the interests of
the Lenders or the Borrowers and their Subsidiaries.
5. Default, Remedies.
(a) The obligations of the Guarantor hereunder are independent of and
separate from the Guaranteed Obligations and the obligations of any other
guarantor of the Guaranteed Obligations. If any of the Guaranteed Obligations
are not paid when due, or upon any Event of Default or any default by any
Borrower as provided in any other instrument or document evidencing all or any
part of the Guaranteed Obligations, the Agent may, at its sole election,
proceed directly and at once, without notice, against the Guarantor to collect
and recover the full amount or any portion of the Guaranteed Obligations,
without first proceeding against any Borrower or any other guarantor of the
Guaranteed Obligations, or against any Collateral for the Guaranteed
Obligations under the Security Agreement or otherwise against any Collateral
under other Collateral Documents.
(b) At any time after maturity of the Guaranteed Obligations, the
Agent may, without notice to the Guarantor and regardless of the acceptance of
any security or collateral for the payment hereof, appropriate and apply
toward the payment of the Guaranteed Obligations (i) any indebtedness due or
to become due from the Agent to the Guarantor and (ii) any moneys, credits or
other property belonging to the Guarantor at any time held by or coming into
the possession of the Agent or any of its affiliates.
(c) The Guarantor hereby authorizes and empowers the Agent, in its
sole discretion, without any notice (except notices required by law to the
extent such notice as a matter of law may not be waived) or demand to the
Guarantor whatsoever and without affecting the liability of the Guarantor
hereunder, to exercise any right or remedy which the Agent may have available
to it, including but not limited to, foreclosure by one or more judicial or
nonjudicial sales, and the Guarantor hereby waives any defense to the recovery
by the Agent against the Guarantor of any deficiency after such action,
notwithstanding any impairment or loss of any right of reimbursement,
contribution, subrogation or other right or remedy against any Borrower, or
any other guarantor, maker or endorser, or against any security for the
Guaranteed Obligations or for any guaranty of the Guaranteed Obligations. No
exercise by the Agent of, and no omission of the Agent to exercise, any power
or authority recognized herein and no impairment or suspension of any right or
remedy of the Agent against the Guarantor, any other guarantor, maker or
endorser or any security shall in any way suspend, discharge, release,
exonerate or otherwise affect any of the Guarantor's obligations hereunder or
give to the Guarantor any right of recourse against the Agent, the Lenders or
the Letter of Credit Issuers.
(d) The Guarantor consents and agrees that the Agent shall not be
under any obligation to make any demand upon or pursue or exhaust any of its
rights or remedies against any Borrower or any guarantor or others with
respect to the payment of the Guaranteed Obligations, or to pursue or exhaust
any of its rights or remedies with respect to any security therefor, or any
direct or indirect guaranty thereof or any security for any such guaranty, or
to marshal any assets in favor of the Guarantor or against or in payment of
any or all of the Guaranteed Obligations or to resort to any security or any
such guaranty in any particular order, and all of its rights hereunder, under
the Security Instruments and the other Loan Documents shall be cumulative. The
Guarantor hereby agrees to waive, and does hereby absolutely and irrevocably
waive and relinquish the benefit and advantage of, and does hereby covenant
not to assert against the Agent any valuation, stay, appraisal, extension or
redemption laws now existing or which may hereafter exist which, but for this
provision, might be applicable to any sale made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Guaranty or the Security Instruments. Without limiting the generality of the
foregoing, the Guarantor hereby agrees that it will not invoke or utilize any
law which might cause delay in or impede the enforcement of the rights under
this Guaranty, the Security Agreement or any of the other Loan Documents.
6. Miscellaneous.
(a) This Guaranty shall be irrevocable as to any and all of the
Guaranteed Obligations until the Credit Agreement has been terminated, the
commitments of the Lenders to extend credit under the Credit Agreement have
been terminated and all Guaranteed Obligations then outstanding have been
repaid.
(b) This Guaranty shall be binding upon the Guarantor and upon its
successors and assigns, heirs and legal representatives and shall inure to the
benefit of the Lenders and the Letter of Credit Issuers; all references herein
to the Borrowers and to the Guarantor shall be deemed to include their
successors and assigns, heirs and legal representatives as applicable. Each
Borrower's successors and assigns shall include a receiver, trustee or
debtor-in-possession of or for such Borrower. All references to the singular
shall be deemed to include the plural where the context so requires. The
Guarantor acknowledges the Agent's acceptance hereof and reliance hereon.
(c) No delay on the part of the Agent in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
the Agent of any right or remedy shall preclude any further exercise thereof;
nor shall any modification or waiver of any of the provisions of this Guaranty
be binding upon the Agent, except as expressly set forth in a writing duly
signed and delivered by the Agent or on the Agent's behalf by an authorized
officer or agent of the Agent. The Agent's failure at any time or times
hereafter to require strict performance by any Borrower or of the Guarantor or
any other guarantor of any of the provisions, warranties, terms and conditions
contained in any promissory note, security agreement, agreement, guaranty,
instrument or document now or at any time or times hereafter executed by any
Borrower or the Guarantor or any other guarantor and delivered to the Agent
shall not waive, affect or diminish any right of the Agent at any time or
times hereafter to demand strict performance thereof and such right shall not
be deemed to have been waived by any act or knowledge of the Agent, its
agents, officers or employees, unless such waiver is contained in an
instrument in writing signed by an officer or agent of the Agent and directed
to the Borrowers or the Guarantor, or any of them (as the case may be)
specifying such waiver. No waiver by the Agent of any default shall operate as
a waiver of any other default or the same default on a future occasion, and no
action by the Agent permitted hereunder shall in any way affect or impair the
Agent's rights or the obligations of the Guarantor under this Guaranty. Any
determination by a court of competent jurisdiction of the amount of any
principal and/or interest owing by the Borrowers to the Agent shall be
conclusive and binding on the Guarantor irrespective of whether it was a party
to the suit or action in which such determination was made.
(d) THIS GUARANTY SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK. Whenever possible,
each provision of this Guaranty shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Guaranty.
(e) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR
OR ITS PROPERTY IN THE COURTS OR ANY OTHER JURISDICTION THE AGENT OR THE
LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR
OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE
JURISDICTIONS.
(f) EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO SUCH PARTY AT ITS
ADDRESS SPECIFIED ON THE FIRST PAGE HEREOF OR SET FORTH IN SECTION 14.8 OF THE
CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5)
DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS POSTAGE
PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE
LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
(g) WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING
OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY
OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
(h) This Guaranty (and any instrument or agreement granting or
creating any security for this Guaranty) contains all the terms and conditions
of the agreement between the Agent and the Guarantor relating to the subject
matter hereof. The terms or provisions of this Guaranty may not be waived,
altered, modified or amended except in writing duly executed by the party to
be charged thereby.
(i) Neither the Agent nor its Affiliates, directors, officers,
agents, attorneys or employees shall be liable to the Guarantor for any action
taken, or omitted to be taken, by it or them or any of them under this
Guaranty, or the other Loan Documents or in connection therewith except that
no person shall be relieved of any liability for gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction.
(j) The Guarantor warrants and agrees that each of the waivers set
forth in this Guaranty are made with full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable. If
any of said waivers are determined to be contrary to any applicable law or
public policy, such waivers shall be effective only to the maximum extent
permitted by law. Should any one or more provisions of this Guaranty be
determined to be illegal or unenforceable, all other provisions hereof shall
nevertheless remain effective.
(k) Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Guaranty.
(l) Captions are for convenience only and shall not affect the
meaning of any term or provision of this Guaranty.
(m) All notices and other communications provided for hereunder shall
be given in the manner set forth in the Credit Agreement and to the addresses
set forth in the Credit Agreement or, in the case of the Guarantor, at its
addresses set forth above.
[Signature page follows.]
IN WITNESS WHEREOF, undersigned have made this Guaranty as of the
date first above written.
ANNTAYLOR STORES CORPORATION
By: /s/ James M. Smith
--------------------------------
Name: James M. Smith
Title: Senior Vice President, Chief
Financial Officer, Treasurer
and Assistant Secretary
Agreed and accepted to as of
the date first above written:
BANK OF AMERICA, N.A.,
as Agent
By: /s/ Jang S. Kim
-----------------------------
Name: Jang S. Kim
Title: Vice President